August 5, 2014 10:11 AM, EDT

Deutsche Post Earnings Beat Estimates on Parcel Business

Ralph Orlowski/Bloomberg News

Deutsche Post AG’s second-quarter profit beat analysts’ estimates as the German parcel business and international express unit of Europe’s largest postal company expanded.

Earnings before interest and taxes rose 5.7% to 654 million euros ($878 million), the Bonn-based company said. That compares with the average estimate of 609.5 million euros from eight analysts compiled by Bloomberg News.

Deutsche Post reiterated a forecast for earnings before interest and taxes to rise to as high as 3.1 billion euros this year, while scrapping a 2015 target as it spends more to make the global forwarding and freight units competitive.

Earnings before interest and taxes next year will be “significantly” better than 2014, Deutsche Post said. That compares with an earlier forecast for EBIT of 3.35 billion euros to 3.55 billion euros. Analysts expect the measure to climb to 3.01 billion euros this year and 3.40 billion euros in 2015, according to average estimates. Deutsche Post also said EBIT will rise to 3.4 billion euros to 3.7 billion euros in 2016.

Operating profit at the mail and parcel business will be about 100 million euros higher than previously forecast this year, and the DHL units will earn about 100 million euros less than previously expected on weakness in freight forwarding, Deutsche Post said.

Deutsche Post, which claims the No. 1 spot in airfreight forwarding, said volumes rose 1% in the first six months, and ocean freight advanced 5.2 %.